Wanadoo S.A. Business Information, Profile, and History

france internet company telecom

We build and develop Internet access products, services and tools and produce great portal content--all to help our customers get the most from the Internet.

History of Wanadoo S.A.

Wanadoo S.A. is one of Europe's top three Internet service providers (ISPs), along with rivals T-Online and Tiscali. The company, a subsid iary of France Telecom, boasts nearly ten million customers chiefly i n France, the United Kingdom, Spain, and The Netherlands, but also in Morocco, Jordan, Mauritius, and Algeria. France remains Wanadoo's si ngle largest market, accounting for more than four million subscriber s. The company is also one of the leading ISPs in the United Kingdom, through its subsidiary Wanadoo UK, formerly Freeserve. The company's Internet services have focused especially on building up its broadba nd network, based on both the ADSL and ADSL+ protocols. In 2004, the company launched its WIFI-equipped Livebox, combining Internet capabi lity with Internet telephony capacity. Since late 2005, the company a lso has begun rolling out Internet television services as well. Wanad oo's true strength, however, lies in its strong content and services component. The company's PagesJaunes Internet-based yellow pages dire ctories are a major source of revenues for the group, and include a b ase of nearly 700,000 business customers. The company also has moved to extend its directories operations into other markets, particularly Spain. Wanadoo also controls online shopping site Marcopoly, special ized in appliances and electronics, and Alapage, specialized in books , CDs, and video. Another Wanadoo operation, Voila, is France's leadi ng French-language Internet portal and search engine. Parent company France Telecom took full control of Wanadoo, which had previously lis ted 10 percent of its stock on the Euronext Paris Stock Exchange, in 2004. At the end of 2005, France Telecom signaled its intention to me rge Wanadoo with its mobile telephone subsidiary, Orange, in order to create a single overriding brand. Wanadoo is expected to be rebrande d as an Orange subbrand following the merger process, which could tak e as much as 18 months to complete. In 2004, Wanadoo posted revenues of EUR 3.25 billion ($3.9 billion).

Late Internet Entry in the 1990s

France Telecom was a true pioneer in offering online services to the general public. Long before the rise of the Internet and the World Wi de Web, France Telecom had developed its own proprietary service, wit h its own terminals, using ordinary telephone lines. Launched in 1982 , Minitel, as the service was called, provided users with directory s ervices, as well as a range of other services, such as paid chat and information services. Unlike the Internet, where users paid for the c onnection but where content was, in large part, free, Minitel users p aid both for their connection time and for the various services they used. A third revenue stream came from the rental of the Minitel term inal to customers. Yet this proved an advantage as well, at a time wh en personal computers remained an expensive purchase.

As such, Minitel became an important source of revenues, and huge pro fits, for France Telecom. By the early 1990s, revenues from Minitel n eared FRF 9.5 billion (equivalent to $1.5 billion). Understandabl y, France Telecom saw little interest in developing its own Internet service in the early 1990s. Minitel appeared solidly entrenched in Fr ance, despite the inroads made by the arrival of early paid online se rvices, including America Online (AOL), Compuserve, and later, MSN. P art of Minitel's strength lay in the extremely low penetration of per sonal computers among the consumer population.

A number of factors converged to give a boost to the Internet market in France in the mid-1990s. Prices on personal computers had started to shift downward. The development of new multimedia features, and es pecially the addition of soundcards, high-resolution color graphics, and then CD-ROMs as standard equipment, provided a platform for a wid er range of uses, and made the personal computer a more appealing con sumer appliance. A new generation of higher-speed modems arrived towa rd the mid-1990s as well; in just a few years, the maximum connection speed had risen from just 1,200 bits per second (bps) to a maximum o f 56,000 bps. The faster speeds were particularly attractive given th e arrival of a major Internet innovation, namely, the World Wide Web, which provided a graphical interface to the Internet for the first t ime.

By 1995, a growing number of companies had begun to vie for France's nascent Internet market. As the French telephone monopoly, France Tel ecom naturally benefited from the steady rise in the use of its telep hone lines, all the more so because, like most of its European counte rparts (and unlike in the United States), customers were accustomed t o paid local calls and to per-minute charges. In addition, a large nu mber of new Internet users living in the country's provinces were for ced to connect using higher-priced interregional and long-distance ph one numbers.

Yet the rise of the use of the Internet and online services clearly t hreatened Minitel with extinction. As revenues from Minitel began to drop, especially since many of the services available through Minitel could be had for free through the Internet, France Telecom was force d to rethink its indifference to the Internet. In January 1996, there fore, the company announced that it was setting up its own Internet s ervice provider, called Wanadoo.

Wanadoo went live in May 1996. A major feature of the new service was its use of a single telephone number that was accessible nationwide at local dialing rates. While this service was put into place for the country's other national ISPs, Wanadoo greatly benefited from France Telecom's backing in a number of ways. Wanadoo was given control ove r the implementation and access to the newly launched online version of the French yellow pages, PagesJaunes. Through the end of the 1990s and into the 2000s, PagesJaunes remained Wanadoo's single largest so urce of revenues and profits. Another benefit from its relationship w ith France Telecom was its access to its parent's countrywide network of retail stores, giving the company closer proximity to potential c ustomers.

Pan-European Provider in the 2000s

A major step forward for Wanadoo came in 1997 when it teamed up with MSN, in the midst of a brief bid to rival AOL in France. Rather than set up its own network, however, MSN turned to Wanadoo. This placed W anadoo in position to scoop up MSN's customer base when the Microsoft -owned company decided to exit France in 1998. Also that year, the co mpany lowered its subscription rates, undercutting certain of its riv als by as much as 30 percent in a bid to gain market share. By the en d of that year, Wanadoo had established itself as the clear Internet leader in France.

In addition to boosting its subscriber base, Wanadoo launched an effo rt to expand its range of content and services. By the end of 1999, t he company had added several services, including the French-language portal and search engine Voila, which rapidly became one of the leadi ng portals in France. The company also launched a direct-marketing wi ng, Mediatel, while making a series of acquisitions, including Alapag e.com, an e-commerce book, music, and video seller; and the Kompass f ranchises for France, the Benelux market, and Spain. In 2000, the com pany boosted its content portfolio again with the purchase of Marcopo ly, an e-commerce site specialized in home appliances and electronics .

By 2000, Wanadoo counted more than 1.3 million subscribers in France, representing a market share of more than 50 percent. The company's r evenues by then had topped EUR 800 million. Some 87 percent of the gr oup's sales, however, were still generated by its Yellow Pages divisi on. Indeed, much of the success of Wanadoo's initial public offering (IPO) in 2000 came from France Telecom's decision to bundle in the Pa gesJaunes unit as part of the launch.

The IPO, of just 10 percent of Wanadoo's stock, was enough to fuel Wa nadoo's drive to become one of Europe's leading Internet groups. The company had initiated this effort in 1999, launching its ISP service in Belgium and The Netherlands, and planning an entry into Denmark as well. Wanadoo also targeted the Spanish market, which was then one o f the least developed Internet markets in Europe. For its entry into Spain, Wanadoo acquired a 69 percent stake in Spain's Uni2, an Intern et service provider, which served as the backbone for the launch of t he Wanadoo Spain service. The company quickly built up a position as number three ISP in Spain.

France Telecom's acquisition of U.K. mobile telephone company Orange in 2001 pointed the way for Wanadoo's next, and largest, expansion ef fort. Shortly after, Wanadoo acquired Freeserve, the leading ISP in t he United Kingdom, in a deal worth more than $2 billion. The addi tion of Freeserve added more than 1.5 million subscribers to Wanadoo' s subscriber base, propelling the company into the top ranks of Europ ean ISPs. Eighteen months after the Freeserve purchase, Wanadoo chang ed its U.K. subsidiary's name to Wanadoo UK.

Freeserve had been set up as part of a trend in Europe that saw the r ise of a whole new class of Internet providers offering their service s for free. The trend helped encourage the breakthrough in the Europe an Internet penetration rates, which had lagged far behind the United States and Japan. Wanadoo was forced to follow suit, and launched it s own free subscription service. The loss of these subscriber revenue s encouraged Wanadoo and France Telecom to step up the rollout of the next generation of Internet services, based on the high-speed ADSL p rotocol. In this way, Wanadoo was able to retain many of its free-sub scription customers, shifting them toward paid broadband access.

Wanadoo next turned to Spain, where it paid EUR 360 million ($336 million) to acquire the directory publisher Indice Multimedia. By 20 02, the company had acquired EresMas, from Grupo Auna, adding more th an one million subscribers. The EresMas purchase boosted Wanadoo to t he number two spot in the Spanish ISP market. In The Netherlands, the company grew through its purchase of MyWeb B.V., adding 110,000 cust omers to become that country's number three player.

Not all of Wanadoo's international efforts were successful, however. The company had failed to gain a significant position in Belgium, ris ing only to fifth place. In 2003, Wanadoo sold off its Belgian arm to Tiscali. Nonetheless, for the most part Wanadoo'ss strategy had paid off. By the end of 2002, the company's sales had topped EUR 2.0 bill ion. In that year, as well, Wanadoo became the first of the major Eur opean ISPs to turn a profit.

France remained the company's stronghold, with more than four million subscribers, including some one million broadband subscribers by 200 3. Indeed, the broadband segment was now driving Wanadoo's growth, ac counting for some two-thirds of all new subscribers. By 2004, as ADSL modem speeds topped 2 megabits per second (Mbps), with a promise to reach as high as 20 Mbps by the end of that year, Wanadoo launched it s Livebox, a WIFI-enabled modem and router featuring Internet telepho ny services, and the promise of ADSL-based television transmission. B y 2005, Wanadoo's subscriber base neared ten million, and revenues ha d passed EUR 3.25 billion.

The mid-2000s promised a major shift in the telecommunications market , as the mobile telephone sector prepared its own high-speed networks . "Convergence" became the buzzword, combining traditional voice tele phone services with Internet access and a whole new range of services .

France Telecom began to position itself for the new market, and in 20 04 acquired the minority shares in Wanadoo. By 2005, France Telecom h ad revealed its intention to merge its Orange and Wanadoo brands into a single brand identity. As part of that process, which was expected to last as long as 18 months, Wanadoo was expected to be rebranded u nder the Orange name. In the meantime, Wanadoo continued to play a pr ominent role as one of the true motors of the European Internet marke t.

Related information about Wanadoo

Wanadoo is the former name of the ISP division of
Orange SA, which is a
subsidiary of France T辿l辿com. It operates in France, the United Kingdom, the
Netherlands,
Spain, Algeria, Morocco, Senegal, Mauritius, Madagascar, Lebanon & Jordan. In 2000, Wanadoo also took over the major British ISP
Freeserve, which had
previously been part of the Dixons Group (now DSG International
plc). wck2.companieshouse.gov.uk/46d6968cb298af59873c5ebcb4030945/compdetails

Wanadoo changed to Orange on 1st of June 2006 to simplify branding by
France
T辿l辿com, this merging of companies has created a single brand
offering mobile telecommunications and internet services.

Orange is currently
the largest ISP in Europe
(counting the subscribers of Telekomunikacja
Polska) with over ten million subscribers, largely concentrated
in France, the UK, Spain, the Netherlands and Poland.

1999: Wanadoo acquires Alapage.com, an online book, video, and music store; the company enters Spain through the acquisition of 69 percent of Uni2; the company enters The Netherlands and Belgian marke ts.

2000: Wanadoo is listed on the Euronext Paris Stock Exchange; Marcopoly, specialized in home appliances and electronics, is acquire d.

2001: The company acquires Freeserve, the leading Internet ser vice provider (ISP) in the United Kingdom (later re-branded as Wanado o UK).

2002: The company acquires EresMas in Spain, becoming that mar ket's number two ISP.

Citing this material

Please include a link to this page if you have found this material useful for research or writing a related article. Content on this website is from high-quality, licensed material originally published in print form. You can always be sure you're reading unbiased, factual, and accurate information.

Highlight the text below, right-click, and select “copy”. Paste the link into your website, email, or any other HTML document.